This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.


A bit of data which remembers the affiliate who forwarded a user to our site and recognises orders from those who become customers through that affiliate.


Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Enrol now on the free landlord tax strategies course

To enrol in the 7 tax saving strategies email course complete the form below. The first module will be emailed to you immediately.

Enrol now on the free landlord tax strategies course

Thank You!

Free Tax Saving Strategies Course
The seven FREE property tax busting strategies course reveals the secrets of how to legitimately beat the taxman and boost your property profits!
View All Questions

Are these costs I incurred of a 'capital' or 'revenue' nature?

Question Could you please clarify whether the following costs are deemed to be of a 'capital' or 'revenue' classification:

a) Mortgage broker fees i.e. I have paid a mortgage broker a 1% arrangement fee
b) Mortgage lenders arrangement fee
c) Property valuation costs

Arthur Says

In IR150 para 180, of the 'Taxation of Rents' manual it says the following: "Costs you incur in obtaining loan finance for your rental business are generally deductible in computing rental business profits provided they relate wholly and exclusively to property you let out on a commercial basis. These costs include loan fees, commissions, guarantee fees and fees in connection with the security of a loan."

This therefore means that a) and b) are classed as revenue expenditures and can therefore be offset against the rental income.

Property valuation costs on the other hand are of a 'capital' nature. The following paragraph from 'Taxation of Chargeable Gains Act 1992' proves this to be the case:

'For the purposes of this section and for the purposes of all other provisions of this Act, the incidental costs to the person making the disposal of the acquisition of the asset or of its disposal shall consist of expenditure wholly and exclusively incurred by him for the purposes of the acquisition or, as the case may be, the disposal, being fees, commission or remuneration paid for the professional services of any surveyor or valuer, or auctioneer, or accountant, or agent or legal adviser and costs of transfer or conveyance (including stamp duty) together:

(a) in the case of the acquisition of an asset, with costs of advertising to find a seller, and
(b) in the case of a disposal, with costs of advertising to find a buyer and costs reasonably incurred in making any valuation or apportionment required for the purposes of the computation of the gain, including in particular expenses reasonably incurred in ascertaining market value where required by this Act.

So to summarise, a) and b) are revenue costs and can be offset against your annual rental income and c) is a capital cost which can be offset against the capital gain when you sell the property.

Landlord Tax Secrets Get our SEVEN FREE Landlord Tax Saving Strategies - Guaranteed To Slash Your Property Tax Bills!
Click here for more.

Got a burning tax question?

Why not submit a tax question to our tax advisors

Ask a Question